Blawy Posts: 3, Reputation: 1 New Member #1 Nov 10, 2014, 11:44 AM
What is the relationship between product X and Y in this demand curve? Substitute or
What is the relationship between product X and Y in this demand curve?
Substitute or complement? Qdx = 80 - 3Px + 2Py - 10I
 ebaines Posts: 12,132, Reputation: 1307 Expert #2 Nov 10, 2014, 12:04 PM
I won't give you the answer, but I will help you through it so you can solve it yourself. From the equation if the price of y increases does Qx increase or decrease? What would you expect Qx to do if x is a complement of y and y's price increases? How about if x is a substitute for y? Please answer these and we'll be happy to check your answers.
 Blawy Posts: 3, Reputation: 1 New Member #3 Nov 10, 2014, 12:27 PM
If x is a complement of y and y's price increases, Qx will decrease? If x is a substitute of y, then Qx will increase.
 ebaines Posts: 12,132, Reputation: 1307 Expert #4 Nov 10, 2014, 12:48 PM
Originally Posted by Blawy
If x is a complement of y and y's price increases, Qx will decrease? If x is a substitute of y, then Qx will increase.
Seems logical. So, what's your answer - is x a complement or substitute for y?
 Blawy Posts: 3, Reputation: 1 New Member #5 Nov 10, 2014, 12:52 PM
Complement?
 ebaines Posts: 12,132, Reputation: 1307 Expert #6 Nov 10, 2014, 12:56 PM
Are you guessing? Have you figured out what happens to Qx when Py increases?

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